years. it's the same thing. judy, we got to be out at the top of the hour. we'll do this again when we have more time. i'm still thinking about our previous interview and this one. >> i think that one was inspiration for the "journal" piece today. >> thank you and we're done make sure you join us tomorrow "squawk on the street" coming up next ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber at the new york stock exchange bulls trying to put a five-session losing streak to bed this morning futures green, although some of that is pinned to oil, up 5% on news of this keystone pipeline interruption in nebraska road map begins with stocks looking to bounce back after five days down tesla continues to drag on the nasdaq >> plus exxon's updated capital

plans, the oil giant looking to boost its buybacks, reduce greenhouse gas emissions, and double cash flow by 2027 and we've also got an exclusive interview with black s stone's president, jon gray. we're going to be talking about concerns over the company's breit business the s&p coming off five straight negative days yesterday, it was citi's chief, jane fraser, talking about the economy, warning that the u.s. might be headed toward a recession. >> compared to elsewhere in the world, it is good to be american and i think we've seen the resiliency in the economy. obviously, things are softening. we're anticipating that the chairman powell is going to hike the rates while they slow. but they're higher than the market and therefore more likely to set

in the second half of next year. >> pretty consistent with what she said all year, jim, but your complaint this week has been that the bank ceos are too gloomy >> i think they need to be more constructive i'm not asking for optimism. i'm asking for constructive dialogue where we talk about -- obviously, there's risk but there's rewards, and the idea that you just kind of say, listen, likely to enter a recession because they're looking at what the twos and the tens >> what's constructive dialogue, though, versus not being optimistic what do you mean >> well, i think the idea that you're trying to decide, make a decision about whether we'll enter a recession or not, i think, is when you're a banker, and you're regarded as someone who is a statesperson that we listen to, i think it's very important to talk about the actual inputs. do you see anything at your bank that indicates recession >> don't you think that -- you don't think that jane fraser or jamie dimon or david solomon -- i should call him

david "recession" solomon. you can ask the guy, how's the weather? recession. you don't think they're seeing things that bring this to the forefront? >> sure, but you can also be seeing things that are quite good how do we have great cash balance and go into recession? how do we have such incredible job demand and go in recession i think that you have to explain the quandary of what we could have and therefore, open up the quizzical situation where everybody can get a job and yet we have recession. what kind of recession is that i would like to be able to see -- it's difficult for me or for them to say, here's what an inflation environment can produce, because we haven't been in one in a long time. i want more of a discussion about how you could have what you see in your dashboard and recession, as opposed to just sticking your finger up and saying, there's going to be a recession. that's all i'm saying that when we look at things, we often wonder how they

happen, and given the fact that these banks are very big banks and they have a good panoply of things, how did they reach this conclusion >> it's interesting because david's point about david solomon, the house view at goldman is that a recession is not likely there's a weird split there. >> you can't ask me -- maybe we're all supposed to love the fact that in a democracy, you can have many different views, but i'm confused by solomon versus kostin. i mean, i'm confused by semblance versus dimon these are really good strategists who have analyzed the situation and have fantastic empirical data that indicate otherwise, and yet their spokespeople have decided to make us have a collective sense of gloom >> do you think it's to get leverage to reduce head count or do reductions in force or bring pay in >> i think you don't need that you just do it the great industrials know how to do that i think that these people are just probably -- look, actually, goldman, i saw a department one

day, there was a department, and the next day i went down there and the department had vanished. >> you do seem to be questioning the motives behind it to the extent that you don't think it's simply based on the fact that as chief executive, you have a broad view of the overall business lines and you may be seeing things that give you concern. >> you may be seeing things that give you concern in the same sense that, you know what? we had hurricane sandy, and sandy's always going to be concerning, but that doesn't mean that it should be front and center i want to know how it's possible to have a view of the recession, given the fact that your bank is more solvent than it's ever been and therefore it should be able to help make it so that whatever happens, a slowdown, is muted. but more important, these people do not recognize their power and i see, in here, more people who say, you know what i'm not going to do what i was going to do, because i heard jamie dimon. now, if that's -- because people have very little trust in politicians. all democrats say the economy's

great. all republicans say the economy's awful. so, we can't trust them at all they're the guys who you really can't trust. so, we look for these neutral figures of banks, and we want to hear, well, look, how is your -- does your consumer have more money in the bank than before? is your consumer leveraged what's your situation with jobs? these are -- i want empirical, not rhetoric, okay i want empirical, not anecdotal. and i don't want to hear that, you know what, i feel there's a recession because i feel there's a recession. i mean, that's not -- that's kind of like what frank slouten said to me, the ceo of snowflake. he said, the guidance is the guidance well, there you go or maybe what matt furlong said at the end of the gamestop conference call. the path carries risk and is taking time, but it is the path we're on i mean, these are the things you can say, and i would like a little more -- i don't want

negative pablum. i want empirical data. and they have the data because these banks are gigantic they know more about the government than the government >> one bit of data we're looking at today are gas prices, now officially lower than they were a year ago, down about 47 cents from last month's average. oil's down 4% year to date hit $72 yesterday, jim, despite the pop this morning >> how about the fact that i had campbell's soup on last night? i had hormel on the week before. is anyone even talking about the fact that wheat is at a 14-month low? $7.23 a bushel there's a domestic glut of wheat in russia. we had a shortage of wheat a year ago this bogus move right now on oil, off the keystone, i mean, that -- you know those stock market futures started going up after this keystone leak, as if they're lock stock with oil? there are some silly things going on but when i hear the things that we all just said, and i listen

to the bank people, i think that the bank people are out of touch with what's going on in the country. >> of course, we also had exxonmobil giving us sort of new -- its new corporate plan, so to speak, not that different from the old corporate plan, but an increase in what they're spending on low-carbon solutions from $15 billion to $17 billion, 15% overall increase certainly, things are going to be focused on exxonmobil we had an interview about it a month ago, that deal they did for cf to help third parties capture carbon that's going to be an important component of the business going forward. emissions reductions, obviously, taking the permian down to net zero their production number is going to be flat year over year, but they've shut down sockland, that's 65,000 barrels a day. >> but they were a source of growth, and we know that a lot of the oil companies are only going to grow in incremental amounts, because they want to return more money to shareholders, not like the old days when all they knew was if you had a dollar in, you should spend $2 drilling. they don't do that anymore

all these prices are related to the keystone leak. they're all going to disappear in a moment when we hear the keystone is under control. >> we're going to keep the a-block short this morning because david's got an exclusive with blackstone's jon gray that's coming up in the next few minutes. take a look at the premarket as we said, green arrows on this thursday, coming off claims, continuing claims, the highest since february back in a moment get refunds.com powered by innovation refunds can help your business get a payroll tax refund, even if you got ppp and it only takes eight minutes to qualify. i went on their website, uploaded everything, and i was blown away by what they could do.

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one week ago, blackstone's highly successful breit notified its investors that requests had exceeded the monthly and quarterly limit. the news has been a focus for blackstone investors, given breit's importance to the fee-related earnings at the alternative asset giant. here to discuss the future of breit is blackstone's president and c.o.o., jon gray good to have you this morning. glad we could talk about this. you know, yesterday, your company's ceo, steve schwartzman, at a conference said that he finds the concerns over breit "baffling." i'm curious, do you share that bafflement, and if so, what is it that people who are concerned about don't fully understand >> well, david, thanks for having me. and definitely, i share steve's

bafflement here. what's happened has been very surprising, given our performance. and i think it's really been a disconnect between performance and fund flows, and what i think would be helpful to make -- to help people understand sort of this disconnected reality is to go back in time a bit. we set up breit six years ago with the goal of delivering great performance to individual investors and private real estate led by our world-class franchise. and that is exactly what's happened we've delivered 13% net to our customers over that period, three times the public reit index. we've done it because we've had the right portfolio positioning, 70% in the sun belt states, which are growing really rapidly, 80% in logistics and rental housing, the fastest-growing sectors in real

estate we would be in a much different position if we had bought office buildings or closed shopping malls. and 90% of the debt, we fix for six and a half years the last couple years, as we got concerns about rising inflation and interest rates we also set up the product with limitations on liquidity we described it as semi-liquid, because we knew at some point there would be periods of volatility, and we didn't want to have to sell assets at the wrong time under pressure. and so, we put limitations in place, including a 5% cap in terms of quarterly liquidity and redemptions. and so, what happened this year is we saw some selling pressure from asia, given the market moves there. that led to some news articles and elevated levels of redemptions, which you referenced the key thing here is performance has delivered and the structure we put in place is

operating exactly as we intended six years ago, so we're incredibly proud of the performance and the structure. >> and we spent a lot of time on this program, i certainly have, talking about the great success and the inflows that you saw, not even that long ago, making this obviously a very significant fee generator. but jon, you can't blame investors, whether asian or otherwise, from looking at the publicly traded reits that may be down as much as 35%, looking at their own piece of breit up 10% and saying, time to sell that would seem to make sense, wouldn't it? >> well, i would say this. if you take a long-term perspective and and see how we've outperformed public markets over time, i would argue the case, investing with us makes a lot of sense and there's been some concern raised on your programs and other, do our valuations make sense? are they lagging and on that point, what i would point out is we've sold $5 billion of property this year, most of it in second half

of the year, at prices above our carrying values. we've also grown our cash flows in breit 13%, 65% higher than the public reit market, and we put in place these hedges, which generated $5 billion of gains this year. now, we're going to give some of that back as rates have come down in the short-term, but long-term, that's very beneficial and then to your question on the public reit market, what's interesting is the public reit market often trades well above asset value and at times well below. so, in covid, public reits went down 45% that didn't happen in the private reit market. during 2021, in our big sectors, public reits went up 63% we didn't mark to that level, because our focus is on delivering private real estate value. so, we feel like we've built a portfolio that is perfectly positioned for the environment we're in

>> right, but you know, when i talk to other real estate professionals, jon, they point to the marks, and they believe, ultimately, that they will have to come down due to changing market conditions, and they say, yes, you're going to make that argument about increasing cash flows. your apartment portfolio, rents are going to keep going up but they come back and say to me, yeah, but you know what? breit trades at a cap rate, even though you don't give us that specifically, let's call it 4% plus publicly traded reits, closer to 6% that's going to catch up with you. that's where the disconnect is, and ultimately, that's why marks have to come down. how do you respond to that >> well, we have been moving up our cap rates, lowering our multiples. we've been moving up our discount rates we've publicly disclosed that our exit caps rates are in the mid-5s in our main sectors a material movement from where they were at the beginning of the year and again, what drove our performance was the strong cash flow growth, the dividends we pay out, and the benefit of the

interest rate hedge, and that was offset by those cap rates. and then i would go again to the fact that we sold $5 billion of properties above our values. then i would make another comment, david, which is just about, as you look forward here, real estate is fundamentally about supply and demand. and what we have in housing in the united states is a chronic shortage, since the financial crisis, in logistics, huge demand because of e-commerce and now companies' desire for redundant inventory, and then we also have the benefit of below-market rents in our portfolio. so, we feel good about the positioning, even as rents moderate here in a more challenging economic climate >> do you think that there was a failure amongst a lot of the investor base to understand the terms by which they were investing? >> i don't think so. i think the big concern -- i was up in boston yesterday talking with a number of our financial

advisor partners the big concern is that because a subset of investors decide to seek liquidity, that the investors who remain in the vehicle smomehow will have a worse outcome, and that goes back to the structure we put in place. it's so important that we have a vehicle where there are limitations on liquidity it's critically important that we run the vehicle with $9 billion of immediate liquidity, that we own a large portfolio of real estate debt securities, and then that we own high-quality, high-performing real estate that we can sell if needed so, i think that's what gives us a lot of confidence. >> well, will you need to start selling at a more aggressive pace in order to meet what may be future redemptions? >> well, i think there will be a mix of approaches, given all those tools we have. i think you will see some selling by us, yes, but because

of the structure, we can do it over time. because we have raised those cap rates, we believe we'll sell at our marks, hopefully higher, and we can do it in an orderly way that continues to create value for shareholders but as i said, because of the liquidity we have, the limitations of accessing liquidity, we can do this in a really orderly way if it's needed and of course, it's very possible here, the flows can change as investors get more confidence about the performance over time. >> they can, they can, but right now, those same investors may be frustrated i mean, they see you getting management fees on capital appreciation that you're at least valuing at a current level, but they can't get liquidity at that same level of capital appreciation i've heard you say it already, but it's not a great look for blackstone, is it? you know, i want out of breit, and i can't get out. >> well, i think the important thing to remind investors is that we set this up as a

long-term vehicle. we set it up as a private real estate investment vehicle. we said at the beginning, it's semi-liquid. it wasn't designed as a mutual fund with daily liquidity, and i would go back to performance if you're a customer in breit, and you have gotten this performance, 13% compounded for six years, up this year when the rest of your assets are down 20%, 25%, you look at blackstone, and you say, wow, you guys have done an incredible job deploying our capital in exactly the right geographies, exactly the right sectors with the right balance sheet. so, i think they have confidence in us. they've understood we've set up the right vehicle, and that's the message we want to deliver >> and so, what about when january and february and march comes, though? i mean, you know, we haven't had a chance, jon, i'm not sure we will, to get your view of the world here, but things seem to be slowing you know, i'm just curious, are you expecting redemptions to

exceed the 2% monthly and 5% quarterly limit in 2023? >> i think it's very hard to predict. obviously, all the noise in the media may make investors nervous, and so you could see elevated levels of redemptions go on for a period of time but again, at the end of the day, it's about the scoreboard it's about delivering for customers in the fullness of time anything can happen in a month or two, but over long periods of time, when we look back at this, the focus is going to be, did blackstone do a good job as a steward of capital did they invest the capital in the right spot and we fundamentally believe we've done that. and this structure, again, i think the disconnect, david, is if you look at blackstone as a firm, the tradeoff has been, we've -- people have traded off liquidity for performance, and that's why we've grown to manage nearly a trillion dollars of assets, and that's exactly what's happening here. >> but is it your expectation that the next monthly marks are going to be down >> well, i can't speak about the

future, specifically, what will happen i said that there could be some headwinds around this swap, but i would say, again, that when we look out, the fundamentals in our two key sectors continue to be very strong, and the rents in place are well below the market rent both of those things give us a lot of confidence over time. >> i just want to come back to you on the ria understanding here it's your belief that the registered investment advisers have been selling breit, creating such success for you, that they fully understood these liquidity issues, and their investors did? that's not been my take, jon i think a lot of people were surprised and said, wait a second, i can't get liquid if i want to? >> it's disclosed on almost everything -- every correspondence it's certainly part of our sales process. we've said this is a semi-liquid product. we talk about it that way. we said one of the reasons we can give you better performance

is because you're trading away a portion of the liquidity you're getting access to our capabilities to deploy capital, and it's designed as a long-term vehicle. >> what turns the market around here what ceases redemptions and tracks inflows in your opinion >> i think what happens is over time, if performance continues to be good, you know, you guys were talking at the beginning of the program here about the economy slowing, inflation going down interestingly, the thing we probably should be talking about is if the long bond stayed down, it's gone down, what, 75, 80 basis points in a short period of time. that's obviously very helpful to real estate values and i think the key will be performance will drive the turn around people will recognize that there is fundamentally solid value here, and this portfolio's extremely well positioned. >> now, bcred is facing similar

redemptions. what are you views for next year's economy to the extent that you don't see people continuing to want to access liquidity? >> well, i would just mention on bcred, there we've got a portfolio that's 100% floating rate its yield just went up this week with a dividend increase because fed rates have obviously gone up 95% senior debt. and it has zero percent default. we think it's a really well positioned product, and again, we think performance will be good it's hard to say what's going to happen in the near term, and fund flows may not be what we want in the near term. but we're long-term investors. we're focusedon long-term performance, and that is the key for us >> jon, we're going to leave it there. look forward to having you back at some point to have a broader discussion about the economy, of course, but wanted to focus, for obvious reasons be on breit. thank you. >> thank you, david. take care. >> you too

guys didn't get to ask the broader questions there. we only have so much time in terms of the housing market and things like that, jim. >> right i think that some of this is mechanical the question you raised, i know it's not supposed to be short-term fund. but the question you raised about them making money and these people obviously concerned about losing money or losing some of their investment, is one that money managers face and have to address, and jonathan addressed that to the best of his ability by saying, listen, we didn't give you liquidity when you signed, and all correspondence said you didn't have liquidity, so don't now claim the right to liquidity there is a bit of a caveat emptor, honorable man. it's not like they didn't tell you that this could ever happen. i thought that was spot on i also feel that what he says about long-term does matter. but what i didn't hear was,

they've created maybe the single greatest buying opportunity that we've ever seen, discrepancy between what we're marking versus where they think things are. we're up in boston we're finding investors that can match them i would like to have heard that so that it's an opportunity. all i heard was, they're wrong but if they're wrong -- >> i do wonder about those asian investors. maybe they saw an opportunity to sell out of breit and go into the public reit market because things, to jon's point, right now, are trading below, at least what he believes the net asset value is >> look, if you're in a hedge fund -- i ran a hedge fund and one of the investors wanted money, and we were supposed to be illiquid, and it almost destroyed my hedge fund. but maybe if things are so good in the housing market, just sell some and meet their demands. if they're that good, you know what i saw a lot of housing disposal during 2007-2009 get it done. i don't know, carl

i mean, i listened honorable man. obviously, caveat emptor, but if it's so good, sell the stuff and give the guys the money. >> your point about housing is key, especially on a week where we got toll brothers i know you referenced their view about what could happen to that business in residential if mortgage rates stabilize a little lower here. >> and you know, look, it's very clear, doug yearly, couldn't sell 8,000 homes if he'd like to, so why can't these people sell a huge number of homes? those homes are averaging $900,000 this is not an ftx situation this is simply a situation where there's a valuation discrepancy and an opportunity, and i think that if it's as good as jonathan gray said, then, wow, jonathan gray's team, very wealthy, should just say, look, you know what we'll buy it we're that confident we'll borrow ourselves and buy them >> yeah. although, they're already leveraged in that fund to a certain extent

i think the focus for them is going to be more on potentially creating liquidity to meet their redemption needs >> i would have liked to hear, the markets are robust, we'll sell some houses why not do that? i mean, if you and i were -- >> and they may. but the point -- that key differential, he said, listen, we are selling things at a 5%-plus cap rate but there's belief that they're marking them at a lower -- they don't give you that number specifically, but at a lower number than the publicly traded reits. even though the rents may be very strong, you're selling the asset at a lower number because the yield for -- it has to be higher >> the fact is, they anticipated this could happen, and basically said, listen, we don't want a run on the bank that's created by ourselves i think that if i were in it, i probably would want my money back, just because of fear but there's a fear of what your house is worth now versus three months ago. >> let's get the opening bell

here on this thursday. and the cnbc realtime exchange, at the big board, it's amn healthcare, and at the nasdaq, emls, the official e-sports and gaming property of major league soccer aaron judge, valuations in sports continue to decline >> i think that's become a very big disconnect between what a team may make and how much you want to pay to get a championship and i think that rich people have decided, you know what? i don't really care if i lose a lot of money if i get a championship and i think that when you have the families out and the hedge fund guys in, well, they're not really in it in order to make money. they're in it to win and they're not sensitive. it's kind of like modern art they're in it to look at it, not to necessarily profit from it. >> energy's definitely going to

lead us here this morning. top-performing sector, jim you mentioned the keystone pipeline, but also the china reopening is at play here. >> that was yesterday, and i thought it would have mattered, and it didn't. the keystone pipeline, this is 590,000 barrels per day. okay and it's -- we don't know. it's not the keystone xl, which is the key one we don't know how long is it days is it hours? we do know this. 590,000 barrels is not -- should not cause oil to jump as much as it has, and it will be fixed it's a temporary thing if you want to trade off of that, go ahead, but i think that i happen to like oil but if you don't, this is a great opportunity to sell. period end of story 590,000 barrels taken off the market for x number of days. now, we do know that when you talk off one of these big export facilities of natural gas, that caused a difference, but it took

forever to if i can. i'm saying this is not going to take that long >> right >> i'm still reeling from your interview. >> say again >> i'm still reeling from your interview. >> really? >> i'll tell you why >> i thought it was pretty straightforward. i thought mr. gray did a good job answering many of the questions we have had over the last week about this story >> what it says is, again, if the bankers are so negative, why didn't they listen to him? he's saying, you know what real estate's still pretty good. and yet there's the bankers saying, you know what? i'm concerned about real estate. i did not hear that from him >> fpremier owner of real estate in this country. >> he's talking about capped rates. >> that's it the biggest owner. not just for breit but so many other areas. >> i don't know. i come away from it and i think, maybe the bankers are too worried. there's a very matter man, could have come on and said, there's weakness we can't have a run on the bank. he did not say that. >> right exxon again.

>> did we do the chevron capex >> no, we didn't come to chevron either we should hit both, because they are both out with their plans, to carl's point, organic capex at chevron, $14 billion. >> what tudo you think of that >> i'll leave that to you. >> i just care about the -- mike wirth has been saying over and over again he can buy a quarter of the company with a buyback. stock's been terrible lately it's just so weird that the oil market is often constrained by the chart. and i don't mean that negatively there's just a lot of trend followers who are -- who look at oil, say it's going down, and they sell chevron. but mike wirth, i'm sure, would be willing to buy that chevron, unlike, by the way, jonathan gray, who did not say, we like to buy what they want to sell. we have buyers who want to take advantage of this. i didn't hear that >> right >> he's up in boston he said he's up in boston. maybe he should have said, and we found buyers because it's substantially below where they want to sell and substantially

below the worth. >> buyers for the properties >> right >> well, they did that deal last week, that was a big deal. >> i loved that deal >> and the -- casino real estate or related assets, so there are some buyers, but again, it takes a while to get big real estate deals done >> if they're given away because they got distressed, then i can find buyers. i was a salesperson. just pointing it out >> did we finish our conversation i did want to come back to exxon, 20 to $25 billion in annual capital investments, we mentioned the $17 billion now in low-carbon initiatives through 2027 that did go up 15% last year they were at $15 billion, and now they're saying $17 billion to your point, jim, about buybacks, share repurchase expanded to $50 billion through 2024 and that includes this year >> people should understand, i mean, chevron's a giant company.

$330 billion but 50 they're in there buying stock. with oil where it is, they could say, we're gong to go full-out drill, but they're not, because this is the new responsible way ceos work in the oil patch >> it's certainly pushing back against what the president has said back in october they should not be using your profits to buy back stock or for dividends while a war is raging. >> biden did an amazing job selling the strategic petroleum reserve high he deserves some kudos here. he doesn't seem to take credit, but that's what i would say. i sold high, buy low for the american people. >> tesla is going to be a story today. a bunch of swirling things it's lost 172, which is not quite the november low of $166, but the story, jim, about bankers considering margin loans to replace some of that high-interest debt >> i saw that. i think that the great thing about the collateral is it's

fungible you can do it. you can sell if you want to sell there's a market >> there's a market for the collateral for -- >> tesla >> for the debt? >> well, i'm just saying -- >> i'm not following >> let's say there's a billion dollar -- what is it, a billion dollars in the interest? just take it from him. just claim it. just say, listen, we're taking the tesla stock so that we're not concerned. the stock's down in value. >> banks don't usually do that, though >> they don't, but when i read that article, it seems like they want to do it. they don't even have the right to do it, but the article seemed to act as if they do s is there a clause? >> maybe the article's not accurate >> you're saying -- >> reporting on tesla being inaccurate >> usually, musk will come out and say, this is false >> that's true maybe he hasn't gotten to it yet. he's very busy >> because, as we showed you on the screen, reports of them shortening shifts in shanghai,

delaying hiring. another report, jim, that they're going to maybe consider the china chief of tesla to run the giga factory in texas. >> look, this is a great company, so i didn't want to cast aspersions, but the interest cost on the tesla loan for -- >> it's 12, right? >> $1.2 billion, which does exceed the twitter earnings for all of 2021. >> yeah. >> may have been an ill-advised purchase for all i know. >> $44 billion for twitter >> may have been an ill-advised purchase because it's probably worth, what, 20 15 >> i don't have any idea what it's worth he's got outside investors, so one would expect we'll see something. and i'm sure it won't be pretty at first >> they're going to make you -- >> it's musk you never know >> are they paying you for the check mark or are you paying them i can't figure that out. >> speaking of twitter, this story in "the journal," jim, about salesforce and the disagreements that benioff and taylor had about how taylor was

spending his time. >> taylor was involved in maybe the great civil war, to quote president lincoln. taylor was -- he's the chairman. he took the job at around the same time. i think that he owed a -- i wish he had resigned as chairman, but that's -- he's an honorable person >> he is >> that was a full-time job. being chairman of a company. >> but then it stopped because he has obviously stepped off, but then he still left, even after that responsibility was no longer his >> i think there are unanswered questions. >> can we talk for a minute about the stock price itself, jim? >> of what >> what you're looking at right there. >> no. just kidding >> i mean, you've got starboard in there you've got, you know, i mean, this is -- this has turned into a real rout, man 52% down this year you can take a look at two years. >> no, it's been disappointing >> one of the great growth companies. >> i've liked it since '08 but

this is an example of a classic round trip >> do you think at some point things with jeff smith at starboard become less constructive between benioff and smith? >> well, from both sides, i understand it's constructive but at this point, i think that constructive would be, can we figure out how to make it so that the stock goes higher >> yeah. >> as opposed to just saying, you know what? everything's fine. we need to know -- i mean, is business good? >> what would that -- what would that be? >> well, i think that -- >> do you agree with some of the assumptions he's making in terms of, let's get profitability up, because it lags peers? >> i like companies right now in this moment, not to be dismissing salesforce, where the expenses are far more under control than the revenues. not unlike mark zuckerberg who said, our expenses are out of line with our revenues i would like to hear that. but what you really have to do is grill mark them >> yeah. >> downgraded today, by the way, over at bear

macro-headwinds and the departures could portend execution risk >> butterfield stayed a little bit longer than i thought he would. that's when they bought slack. >> yeah. >> all right i'm going to posit something maybe, just maybe, it's a bargain. it's got a real business, $40 billion, basically, in cash. it's done quite well the product's very good. >> if you're right about some headwinds like currencies turning around next year -- >> currency worth 6% people are saying the profit of 14% is lowest ever, but if you add back the currency, you're talking about 18 to 20%. great growth company my travel trust owns it and if i had a few more answers, i'd probably want to buy more. this is not carvana. can we put up the chart of carvana? i want to show two charts that look exactly the same, but one is better than the other >> carvana is down 99% from, like -- yeah sorry, i was off by 0.5. yeah, 99.4%.

>> the joke this morning is it went from $383 to $3.83. >> you want to go there? you want to go long life put up microstrategy too 1999 to 2001 you want to go real long lives how about the fact that salesforce is amazingly profitable not a -- real money. not adjusted to what ge, under ml, was doing. it's not like that >> understood. >> okay? >> understood. >> the bulgarian real estate is marked correctly >> okay. that's good to hear. how about the polish real estate is that hanging in there >> polish real estate is up from when we bought it. >> all those apartments. >> mexican real estate, you know, i remember him talking about it >> any idea what ge's ceo, i think, in march of '09 -- >> do we have to go into that, david? >> sorry and it led off with, polish real estate >> i remember that >> do you remember that day?

>> i'm not sure they knew they had the bulgarian. i knew they had the bulgarian. i knew the neighborhoods in mexico that they were buying homes. they had homes that were so overvalued, but it wasn't -- it was really that long-term care that wasn't a problem. remember, that was not a problem. it was asterisked. >> yeah, it was an asterisk that kept just moving up until it became $15 billion >> i'm saying that salesforce has real accounting with real profits, and that perhaps it's a buy, not a sell. >> guys, before you -- >> going back to jon gray or exxon? >> i'm going ensomewhere new. we don't talk about tiktok, and the states combatting tiktok, indiana, south dakota, maryland. larry hogan was a dguest earlie. and then, of course, the federal government, where you've got a decent number of senators who want to see the thing banned you've got the biden administration still trying to work through some sort of national security plan that would allow tiktok and its owner, bytedance, to be

maintained in the u.s., but obviously under certainly restrictions but jim, the question is, is there a potential trade here for meta, snap, and others who will clearly, if this were to happen, be enormous beneficiaries? >> i've gone to them at meta i said, isn't this a great opportunity to talk about how reels is the one you should go to but in the self-defeating way that that company's been acting, they came back with nothing. i can actually -- i would like to actually mention the people who have not been helpful, but i'm going to spare them that that great opportunity to be embarrassed and red-faced and go home to their spouses and say, you know what? cramer humiliated me beyond all reason i'm passing on that, because i am a gentleman in the same way that gandhi -- >> still, what i think is the unlikely event at this point that tiktok were banned in the u.s., there's no doubt -- >> unlikely? >> i mean, it's still -- i don't know >> i don't know. bernstein last week, the bernstein desk finally, i'm starting to believe that a tiktok ban might actually happen >> well, reels should come out

and say, made in america >> meta goes up no matter what on that. it's not like instagram is not going to have -- >> europe doesn't want you to be able to really advertise well. can we just say that meta was kind of destroyed by apple they're trying to make a -- kind of come back meta makes a lot of money too. another profitable company >> there's a story in the "times" yesterday about how some employees there want zuckerberg to make a run at a twitter rival. get them where their bread and butter is, as one employee wrote. >> well, i guess so. can we put up a chart of meta and salesforce and carvana >> you want to make yourself feel better? >> no. no schadenfreude? no i've liked salesforce since '08. the crime i committed is what karen cramer konstantin kilimnik t once told me about she said, there is nothing worse than letting a gain turn into a loss nothing. >> you still have 120 points to go on salesforce, so i think

you're looking okay. >> you know what i'm going to go take my salesforce charitable trust and go buy some of the breit that is substantially undervalued by jonathan gray. i don't know i listened to an interview this morning with a guy by the name of mr. wonderful, grilled by our own people >> got some eyeballs today >> and i was actually -- i felt it was a suboptimal situation developing there on the show distinctly >> we got most of these sectors playing some risk on energy, financials, industrials, tech let's get to bob pisani this morning. hey, bob >> it's nice to see financials stabilize because you had a really rocky start to the week ahead of that goldman-sachs financial services conference, and it's not that anybody was particularly gloomy, just cautious was enough to drop some of those big regional stocks up to 7%. we're all up on the major averages look at the movers once again, i call it the little engine that could. that kweb, the china internet, just keeps going you think, like, okay, we already know the story

put that back up i want to talk about that. the story that's going to be with china but there it is. it's been rallying for a couple of weeks now, really since the end of october energy, better metals and mining, there's the reopening. there's the china story. cathy woods, ark innovation, down today banks have stabilized. if you think this china reopening story has played out, look at the movers on the s&p 500. it's all china play stuff. look sorry. there's the hangseng moving on that, on the china reopening story. look at the movers las vegas, $49 that's a new high for las vegas sands. wynn resorts is moving up. freeport, another classic china play freeport was $28, six weeks ago. now it's $39 metals and mining stocks, every day i put up the xme

these are the big s&p 500 leaders, and the majority there are moving on the china play right now. so, as i mentioned, hang seng was up 3% overnight. shanghai and shenzhen were down a little bit, but this has been a big rally in china most of the developed world is short china, so the hang seng has rallied 30% in, we're talking, five weeks or so. the shenzhen, which is like the nasdaq, shanghai, is moving. the shanghai hasn't moved as much shanghai has a lot of state-owned enterprises, the older companies. the hang seng, a little bit different. it's mostly owned by foreign investors and they've been underweight. outside of china, chinese investors have been underweight, shorting china all year. some of this may be short covering, so the shorts are getting run over a little bit in the last few weeks on the reopening story. speaking of heavy volume, we saw heavy volume in kweb

i follow etfs. now, tesla is right near a two-year low we've got issues with shanghai production today, the headline is, this is one of the hot etfs of the year. this is the tesla bear etf, so if tesla's down 1%, this goes up 1% you get the inverse of tesla, and it resets on a daily basis, very important to note that. this has been a monster. it's up about 40% since the end of october it's had big inflows this is played by the daily people who want to play around with tesla speaking of messing around, gamestop has broken some very important support recently of course, we had the earnings report out it was a little disappointing, not that that means much we have three analysts covering gamestop these days. but gamestop's been in a 24 to 28 range for a long time now, and when it broke below that, carl, particularly when it hit 22, in the last day or two, we saw some accelerated movement there. so, yes, technicals very much matter in a stock like gamestop. carl, back to you. >> bob, thank you so much. bob pisani this morning.

as we go to break, let's take a look the a bonds today of course, the big number of the week is tomorrow that's ppi and inflation expectations but for now, yields are mostly higher still watching that inversion between two tens, the highest in several decades. we'll be right back.

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take a look at the markets this morning we have not had a single session this month in which all three stock indices, major indices, have closed higher we'll see if we can do it toy.da last was november 30th we'll get "stop trading" with jim.

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jim, what is on "mad" tonight. >> i'm going to see marc benioff, sit down, get answers we deserve answers people out there deserve answers. answers may be positive. it may turn out to be an opportunity. jonathan gray said, here is an opportunity to buy homes i think marc benioff, the "journal" article was very

disturbing how the company may be divisive, not do what they should because of the fighting and the inability to have a co-ceo let's get some answers maybe the answers are going to be that this is an opportunity or maybe the answers are going to be, you know, it's -- it's kryptonite. >> you have not made up your mind, not right now. >> i like to have as many answers as possible to things that are concerning to our viewers. am i sanguin about the situation? that would show a lack of rigor that i think i'm beyond. >> all right, jim. >> there we go. >> see you tonight, 6:00 >> it's going to be a good interview. >> can't wait. "mad money," 6:00 p.m. eastern time don't miss our interview with the ceo of unilever, as the bulls have green arrows to talk about after five days down we're back in a moment

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"squawk on the street. i'm carl quintanilla with david faber and sara eisen morgan has the day off trying to turn around what's been a challenge ing day. >> we are 30 minutes into the trading session. here are three big movers. tesla falling for a fourth day in a row after a reporter -- after a report announcing plans to shorten shifts at shanghai factory as soon as monday. coupled with the delay of some new hires. it's down more than 50% from its highs. carvana finally seeing green after its worst day ever yesterday when the stock plunged on bankruptcy concerns shares down 40% this week. and then finally, keep an eye on the consumer names today ubs upgrades hershey to buy, downgrades mondelez to hold.

we'll have more on the outlook in just a moment with the ceo of unilever overall, guys, these packaged foods and household product names, they've been good stocks as people feel we're going into a recession and they hold up we've seen that on their top line. >> i'm looking forward to that interview not far from now the top focus for americans when it comes to congress. no, it's not immigration or taxes or aiding ukraine. it's inflation steve liesman joins us now he has more from cnbc's all america survey steve? >> good morning. yeah, according to the all american economics survey, are united on what they want the new congress to do, that is tackle inflation. here are the priorities picked out by the 800 respondents to the poll across the country. 80% say lower inflation, the top pick for respondents to both parties, we'll see this next next is reducing the deficit

immigration third. aid to ukraine, another step down with the bottom three issues, nationwide abortion protection and, of course, in investigating the biden administration, that's the lowest once you get beyond inflation, that's where the partisan shows up some deep. the gop respond ends, lowering inflation and reducing the deficit are 84%. that's a lower rank. not even the top four for the democrats. followed by immigration and border security. and, of course, investigating the biden administration a big deal for our republican respondents. the democrats, lowering inflation, abortion a much bigger number there, of course, aid to ukraine, much higher. and immigration, much lower than for the republicans. trouble for congress, the best way for tackling inflation, probably to reduce federal spending and deficits. it's proven elusive for both parties, no matter who's in

control. another place americans are united, majorities do not want president biden or former president trump to run again 30% say trump should run 61% say no 19% want biden to seek a second term 70% say, don't bother. what's really interesting about this, 57% of democrats do not want biden to run. 37% of republicans don't want a trump candidacy. carl, investors will have to watch the national political scene closely over the next couple of years to figure out what the horse race is going to be >> yep going into a new cycle, steve, for sure steve liesman. turning to the markets, trying to turn it around, citi's jane frazier becomes the latest ceo in the bank sector to warn of recession risks ahead >> elsewhere in the world, it is good to be american. i think we've seen the resiliency in the economy.

obviously, things are softening with the pacing chairman powell, while they slow and for longer >> senior markets commentator mike santoli joins us to break down the action in banks, the commentary, jim's crew that a lot of this has been looking too much at the negative. >> i think everyone's picking up the same market signals, if nothing else if you look at the collapse in treasury yields, and the dollar and what people know the fed has said about what might be required, i think they're internalizing that the market has gone a pretty good way pricing into some kind of softening we do have the offsets ten-year treasury yields go down below 3.2 at yesterday's close, or even right now. that is a little bit supportive.

you're bringing mortgage rates down, gasoline prices. i think there's going to be this tacking, is it 30% soft landing priced in, 45% that actually feeds into what the banks are seeing bank stocks are catching down to some of the other cyclical consumer discretionary, if you look at home builders over the course of the year, they take their pain in the first half and recovering and above their summertime highs whereas banks are seeing it come around. i think it's going to remain a massive debate as to the imminence of a recession, what type it might be and really whether we've already kind of traveled the path in the markets that you might expect. at least part of the way to what you normal get in a recession. >> do you think it's about mortgages and, say, investment banking that's really their focus? we've had airline ceos who say recession is not in their vocabulary. >> that's the stuff they see most directly.

i think consumers in terms of they know what's happening to the deposit base getting spent down slowly in terms of accumulated saving i think the banks are seeing it directly capital markets have been weak for some time. i think the very big banks, they find it natural to get into retrenchment mode, or at least let's try to trim, let's get margins right, let's control what we can control and try to get out front of it. for six months they're saying, we're not seeing any signs of this bank of america today, interesting data showing that even though credit card usage is up across all income levels, the balances as a percentage of the credit limit is way below pre-pandemic levels. people are not strapped yet. >> as we're all talking about recession and executives are, too, and people are planning ahead, the fourth quarter gdp number is said to be very strong the strongest quarter for the consumer 3.4% is the latest tracking number from the atlanta fed. the economy is actually picking

up right now, weirdly. >> service is doing really well. it's been very hard to read the cycle. you had a huge pull forward in goods demand that's now completely rolled over it's a drag on gdp i agree. now, i do see the economic -- if you bundle all the economic data together, is it getting better or worse, it still does look like a softening trend, looks like risks we tip into something worse. i find it fascinating we already have the 20% drop in the s&p that was in the books months before there's a plausible start of any recession >> it's a softer softening trend, though, which is positive mike, thank you. mike santoli let's hit the consumer staples we're seeing a number of them make all-time highs. hershey, general mills, campbell's soup. unilever is hosting investor day. one of the many companies wrestling with offsetting prices

without losing consumers we're joined in a cnbc exclusive by unilever's ceo, alan jope >> great to see you again. >> you're talking to investors today. you're in the middle of a transformation of the business there's been some pressure to perform. where are you in that process? >> well, that's right. we've got 88 of our investors right above where i'm standing now. we've been taking them through the progress we're making on transforming the business. we've been busy the last three or four years. first of all, we reinstalled appetite for basic operational excellence in the company. we've done a lot of portfolio transformation we got out of spreads and ts and expanded into luxury beauty, health and well-being. thirdly, we have a map where we're going to invest. we radically simplified the

organization of unilever the theme of today's investor event is we're ready to invest it's time to step up the investment in the business >> you talked a lot about portfolio management there we're looking at some of your household brands, food brands. there's a report today that -- and this has been going on for years. we've been speculating about this you're looking to sell u.s. ice cream brands, klondike and breyers. are you acting more aggressively on that front? could be multibillion dollar deal here. >> i think you answered the question, didn't you people have been speculating for years about these businesses, and obviously we didn't comment on any particular rumor one way or another, but it is true that we've been taking decisive action on the slow growth parts of the portfolio not just spreads and ts but slower growing brands in other parts of the world it's as important as we inquire into growth spaces, it's important we get rid of businesses that would be better run by someone whose lose

focused on growth than unilever is. >> a lot of people are wondering what's changed since nelson joined the board and whether this -- this is like procter & gamble in a few years from now, where there was a real transformation sped up in that company towards higher performance. >> yeah, well, nelson is a very valued member of our board he brings a lot of experience on the consumer sector. quite frankly, he's a pleasure to deal with and have around the table. and like the rest of our board, he's very supportive of the strategy that we are embarking on shifting our portfolio being really focused on operational discipline one thing that nelson doesn't like it matrix organizations that's what we had until the middle of this year. we've been working for two, three years on this major change we put in place. it seems to be unlocking faster decisions, more category and expertise and higher

accountability in the business as i have been known, five throats to choke at the moment t feels more like five backs to pat. that's especially important as we go into a period where probably the consumer is going to be feeling a bit more pressure in the coming quarters than she has in the last few quarters >> mr. jope, this is david faber. sara asked about divestitures. i'm curious as well how you view potential acquisitions investors in names like colgate always want to convince themselves a unilever one day is going to come along and make the big bid. i don't expect you to address that specifically. how do you think about the possibility of large acquisitions, particularly in an environment where kostitsyner i goes could be very helpful. >> the primary lanes we look for finding acquisitions is fit with strategy and the opportunity to increase momentum growth rate over our category footprint. at the moment we're 100% focused

on bolt-on acquisitions in prestige beauty and in health and well-being we explored one transformational acquisition in the health care space earlier this year. there was some investor dissatisfaction with that idea we committed transformational deals are off the table right now. that's perfectly fine. there's plenty of trapped opportunity in unilever that we're in the process of unlocking right now. >> yeah, the gsk consumer health deal you're referring to alan, broad question what are you seeing from the consumer how is demand globally are you seeing signs of recessionary behavior? >> well, look, it's perfectly natural to expect that the consumer might see some pressure we're definitely not at peak prices yet we may be close to peak inflation, but there's more pricing to come across the sector as you mentioned in the last segment, household savings levels are starting to come down that's been a buffer so far. thirdly, anyone with a variable

rate mortgage is going to start feeling the pain very soon of course, those winter energy bills in the northern hem sphere are starting to hit. we're seeing the world is not flat unilever is 60% of our business is outside of europe and north america, roughly 20% of unilever is in north america, 20% in europe, and 60% elsewhere. and we are seeing a lot of resilience from the consumer in particularly asia, southeast asia, africa, latin america. the u.s. is holding up i think one of the characteristics of the downturn that's not getting enough focus is it's a high employment downturn things have to get pretty bad in your household before you start compromising on things like soap, shampoo and ice cream. >> good point, i guess you said you're raising prices even further you've already, and so has the industry, been very aggressive on the price hikes >> we have well, in this calendar year,

2022, we are facing 4.6 billion euros of cost inflation. and our forecast is that year-on-year, s sequentially there's 2 billion cost inflation coming through our p&l we are trying to mitigate that through savings and efficiency, but some day that will show up in increased pricing by the way, you're hearing that across our sector. >> so, you don't see inflation broadly coming down any time soon, it sounds like >> i see the rate of inflation coming down, but i don't see it getting back to the levels we've enjoyed for the last decade any time soon, no. >> finally, alan, you announced since we last spoke that you plan to retire by the end of next year. i'm curious where the board is, if there's been any decision made on your successor >> well, first, let me tell you, i'm 100% focused on a few more

good quarters for unilever the board, of course, is carrying on an internal and external search. as far as i'm concerned, that's some way down the road the whole company is focused on unlocking the trapped value in unilever you have to engage with our board on that particular question >> will do alan jope, thank you very much thank you for taking the time out of investor day to talk to our audience as we head to break, hear is our road map for the rest of the hour tesla shares cut in half since elon musk's twitter purchase. you'll want to hear what black stone's jon gray said about breit real estate fund we'll bring you the highlights. one company trying to diversify away from china. the ceo of cummins after the break, as we have a big hour ahead and close to session highs. dow's up 270

companies from appear toll our next guest are trying to diversify their supply chains away from china. a lot easier said than done. here to discuss in an cnbc exclusive is the ceo and president of cummins along with seema mody. >> thank you welcome to "squawk on the street." >> great to see you today. >> great to see you as well. let's start in china that's where you make 20% of your highs in the industrial sector we're starting to see some restrictions lift. is that impacting the demand or

activity you're seeing at your factories there? >> as you noted, china is an important part of our business, the products we sell in the country, it's a big market for us, as well as some supply out of china i'm encouraged by the signs that some of the lockdowns are lifting. what i would say is today still the economy has really been down for us in china. and a lot of uncertainty given the lockdowns and how that will transpire in the coming weeks and months. >> so, how do you make your supply chain more resilient, then, jennifer, from dual sourcing to looking at some of your other manufacturing hubs like india, where you mike your hydrobegin combustion engine. >> as you said it, strategy. much of our supply base is in that market as well. globally we look to have redundancy if we see whether it's weather issues or uncertainty in supply

that we're able to adapt and adjust that's served us well in the last two years where we've seen significant challenges across our supply base. >> now, clean tech is one area where you continue to invest in. i know you just announced you're producing electrolyzers. >> as a part of our growth strategy and decarbonization, we have a new business that's investing in a range of zero emissions power train technologies and electrolyzers. we recently announced we'll put those in production. one of our u.s. plants in the minnesota area, 500 megawatts. with the passing of the inflation reduction act, we're seeing increased demand here in the u.s. for green hydrogen and the start of building out an infrastructure that can support decarbonization of our industry. >> hi, jennifer, it's sara

eisen. a question for me. your stock has outperformed, up double digits versus the industrial sector. i'm curious what you're seeing in terms of demand we're trying to read the tea leaves on the economy. we've gotten some mixed signals from the manufacturing sector. ism picked up but we lost jobs in the adp report last month what are you seeing? >> we are exiting two years that's been unprecedented where we've had strong demand and our customers have been using the products we supply, but our oem customers' need to meet that need has been constrained by the supply base. what we see today is our products are performing well in the field and there continues to be strong demand and a desire for us to produce more in most markets outside of china where the economy really is down so, we're continuing to focus on delivering to those customers and meeting their needs. while making sure we're preparing for potential downturn in the future by prioritizing

our investments and focusing on delivering strong results. when i look at how our stock has performed, i think it's a reflection of that strong performance we've had and delivering improved revenue and profitability and also our strategy and the growing understanding of cummins' growth strategy and how we're positioning for the medium and long term as well. >> jennifer, you mention the inflation reduction act and its potentially positive benefits for your parts of the business i'm curious how durable you think that's going to be how many years out can you look at potentially newer or enhanced revenue streams as a result? >> we see decarbonization as a growth opportunity for cummins our markets, commercial and industrial application, it's going to take time it's going to take a range of solutions to meet these different customer needs when you think about a bus that has a pretty short range due to a heavy duty truck with large range, high power. different solutions.

the infrastructure to support those zero carbon solutions of the future will also take time to build the inflation reduction act is key to start to drive more investment in that infrastructure and some early adoption of these technologies that will help scale them and make them more cost effective over time. >> you're trying to get engines that run on alternative fuels. make them a reality, right it takes time. mostly trying to figure out when these products will be profitable to your bottom line, jennifer >> we're focused on helping decarbonize our industry and making sure our customers are successful in their businesses they're running businesses that support our everyday needs and then growing our business and delivering strong results at the same time. we're well positioned to do that because we have a range of different technologies that will meet different customer needs at different times. we understand their applications and how best to meet their needs over time. we're focused on accelerating the adoption of these zero

carbon solutions while also reducing co2 emissions from engine-based solutions that are broadly available today. we think both are critical, both for the environment and to ensure that we have a continued strong economy that meets daily needs. >> i look at your earning results, though. demand for oil and gas engines, you said, are expected to increase by 120% year over year. that was on your earnings call we're now looking at wti crude, which is negative on the year, jennifer does that change the demand equation >> i think the underlying need for energy is there and it's going to continue for some period of time as we build out infrastructure to support electrification to support a movement to green hydrogen for us, those end markets will continue to be a strong demand for us we are benefiting from some stabilization of the oil and gas prices from energy cost perspective. still, energy will be a key issue for us globally. >> that seems to be the case

jennifer, thank you for your time jennifer rumsey, ceo of cummins. >> thanks. meantime, tesla shares have been cut in half since elon musk's twitter deal. we have a bull/bear debate on that up next with the dow up 0.go dot away.

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dog, still alive? checking in on the travel stocks, december's been a rough month for the airlines the u.s. global jets ticker jets down this month. it's a similar story for its top holdings airlines have been one of the worst performing sectors with southwest, delta american, all in the red this month. the moves come after double digit gains for all three names since the summer we had elaine becker, the airline analyst on "closing bell" for cowen. she said it's disappointing because we've seen strong numbers. southwest reinstates its dividend yesterday and the companies are not seeing signs of a slowdown but the market is looking ahead to a potential recession and cut in spending. has been beating up these stocks. >> downgrades of all the booking companies and airbnb earlier

this week. the southwest capacity guidance was not too bad. looking for up 15 in q1. so, who knows, maybe a little more easing in the capacity structure could mean easier fares. labor is the puzzle they have to solve. >> sure. >> a lot of focus on the balance sheet and what this looks like once this surge in demand stops. i think it's surprisesed people how long it's lasting. you go to the airport and airplanes, they're packed and people are paying prices we haven't seen in years for these tickets. >> yes, i agree. >> have you flown lately >> i concur. just wanted your input. >> welcome. let's get a news update with our bertha coombs. >> wnba star brittney griner is heading home in exchange for

prisoner viktor bout >> standing by cherelle in the oval office, i spoke to brittney griner she's on a plane, on her way home after months of being unjustly held in russia, held under intolerable services she'll soon be back home in the arms of her loved ones and she should have been there all along. nbc news reports the white house also fought for the release of american businessman paul whelan, but the russians refused. whelan's brother, david, called for the one for one swap the right decision and said his family was warned before the exchange was made public iran says it has executed a person involved in the protests that have racked that country for months it the first known death penalty carried out related to the unrest "squawk on the street" will be right back after this. this thing, it's making me get an ice bath again.

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tesla's tough ride continues. shares down more than 10% for the week 40% in the past three months let's bring in new street research pierre and roth capital greg i can't think of two better gentlemen to take opposite views. we have talked about this for years and you've been stubbornly bearish. do you feel at least a demand trend, sentiment is coming your way? >> i've always said tesla does not operate in a vacuum. competition is coming and competitors are incredible it appears they have to cut production in china to deal with flagging demand, the price cuts both in the u.s. and china are very clearly pointing to that, while there are some fantastic models that have been introduced in the last year, they're selling like hotcakes. this is very much what we've been talking about, as you said.

tesla still an amazing company they still really created this market but, you know, i think people need to look carefully at what they're willing to pay for this. >> pierre, talk to me. your view of demand. obviously, they have a huge leg up on logistics and supply the stock now being roped into the conversation about the need to finance twitter and their obligations. >> yeah. it's, of course, overhang on the stock. news that broke out this morning, most considering to flex some tesla stock to secure debt twitter has all view is very straight forward. none of these has the scale to present the significant disruption to des la as a

company and even tesla as a stock. you think about twitter, $2 billion in worst case. being able to face financing is is not even -- of the tesla shares have to sell shares or pledge shares to secure that, it could be a very small moving part. the pledges, we're looking at to lower the financial burden on twitter is same order of magnitude of $2.3 billion. it can have impact on sentiment and news flow, not on the stock. >> pierre, there's no denying there does seem to be a connection between the close of the twitter transaction, certainly, and the move down in tesla stock price, far more than the rest of the group. i'm curious, are you concerned about his continued distraction? obviously, he's spending a lot of time on twitter you may not be as concerned as

you indicated near term about some of the financial ramifications, a few margins, more stock he's only one guy. he only has 24 hours in a day, like everybody else. >> yes, yes, david you're absolutely right. really the stock has gotten hurt a lot since the close of the transaction. we call that the twitter discount we see three aspects of it number one, what we just talked, concern about selling more shares second concern is elon musk is very visible in a very negative way, very polarizing way in the public opinion we have tesla brand is suffering from that. could that be an impact? the third aspect is, let's face it, these concerns about demand have been around for -- and they are real there's a slowdown in demand now, i have a very different --

from what's going down in china and things like that lowering production by 20% sounds like really, really bad news now, if you're thinking about a car manufacturer who has increased production, 45% year on year, when you reduce at 20% in one factory, you're going to grow maybe 40% lower in the quarter. have you to remember that there's a lot of negative news for today. that is the difference between connection and demand. and how the manage between the to in shanghai -- seeing adjustments on the back of that make a lot of sense. that's actually not a concern -- a concern to us. >> craig -

>> i was just going to say to craig, it's not like any of their oem legacy peers are having an easy time trying to excise the ice business from the ev business and the street will put pressure on them in the investment that will take the next five years. >> this isn't easy i think you nailed it with your last question to the other guest. elon musk is one man and you've got twitter and tesla going on here tesla's valuation is based on hype we think it's been egregiously overvalued we love what they've done but when you look at what's going on here, the news whipping around -- i should say the suggestion whipping around, that too tom zook is probably going to be tapped the next ceo of twitter -- of tesla, in the near term as people digest that, people have to ask, what's the hype going to be in here? musk has done a tremendous job,

but reality is, they got to make cars they got to make a lot of cars the growth rate is decelerating, having to cut price. their models are long in the tooth. you know, they created this market, but lots of other people are rushing in and they need to push harder for new models and better penetration >> so, is there actually a demand problem, craig? people have warned about this a long time, the competition would come, there's over capacity. is that really what's happening here >> i wouldn't call it a problem. i would say 45% growth of sales of evs is absolutely fantastic but does it warrant a $550 billion valuation when you have toyota out there at about $300 billion. toyota doesn't -- it's not missing anything that tesla has. why does tesla get such a very, very large premium it shouldn't tesla is executing, they created this market. but demand is -- demand is fantastic but other people are seeing that demand, too, and

other people are taking share in this market. tesla does not operate in a vacuum tesla will have to compete for its market share, re fresh their models, be compelling with customers. both in quality and customer service. and they're going to have to cut price. that's really what the real risk is financially in the quarter. people have the model up for 100 basis points higher. automotive gross margins, we're probably looking at a miss so, i'm looking at this as a fairly risky point to own tesla. i think, you know, people are much better off in other things. >> certainly off the lows of the day. got below 172 this morning currently in the green that's going to be a remarkable transformation to watch, this entire industry the next couple of years guys, appreciate it. talk soon, pierre and craig. >> thanks, carl. for the last week or so we've been focused certainly on a lot of reporting on breit, the giant real estate fund launched by blackstone six years ago, but over the last year which took in

massive amounts of assets, investing much in rental apartments, industrial, real estate and the like. and affording those who invested a decent return in terms of a dividend not to mention capital appreciation a week ago, though, after what the company said were asian investors in particular that were focused on exiting breit, it had to say, hey, we reached the limit we have told you about for the last six years, namely 5% of our net asset value over a quarter or 2% in a given month this morning we're able to sit down with blackstone's c.o.o. and president jon gray and talk about the future of breit and why the company had those redemption limits in place >> the big concern is that because a subset of investors decide to seek liquidity that the investors who remain in the vehicle somehow will have a worse outcome. and that goes back to the importance of the structure we

put in place it's so important that we have a vehicle where there are limitations on liquidity it's critically important that we run the vehicle with $9 billion of immediate liquidity, that we own a large portfolio real estate debt securities and then that we own high quality, high-performing real estate that we can sell if needed. so, i think that's what gives us a lot of confidence. >> one key question we discussed is will marks have to come down on the existing portfolio given, in part, the performance of the penetrated reits back and forth about things like cap rates and expected cash flows, but overall, of course, mr. gray, as you might expect, is positive on the portfolio >> as you look forward here, real estate is fundamentally about supply and demand. what we have in housing in the

united states is a chronic shortage since the financial crisis, in logistics huge demand because of e-commerce and now company's desire for redundant inventory. we also have the benefit of below market rents in our portfolio. so, we feel good about the positioning. even as rents moderate here in a more challenging economic climate. >> that's key, the idea they'll be able to increase rents because it comes back to the so-called cap rate or yield, which comes into play when you sell an asset. if you have breit closer to 4%, the thought is, when they actually sell, are they going to get a lesser price because, of course, the rents coming off have to create a yield that's higher we will see. but it's certainly been a focus for investors, of course we'll see what comes in 2023 in terms of continued potential

redemption blackstone's stock for a while reversing what has been significant losses even since they put that redemption notice out there. >> because these fees have been huge for them. there's breit and sreit. i talked barry storm who manages sreit. >> he said this isn't a run on the bank t they have cash flow. 90% of what is in that reit are assets, 10% liquidity. that's for the withdrawal. you can't just withdrawal willy-nilly because the s.e.c. has to put a cap on it so people can actually get their money. >> so jon's point, these are assets you can't just sell overnight. it takes time to sell a large portfolio of apartments or industrial or casinos. >> they both had to halt withdrawals. that could have an impact on the real estate -- >> and they have to keep hitting their limits the argument would be among the investor base, we're paying you a management fee, and i asked this question, at a certain valuation level that you're

saying you're maintaining here, but we can't get that valuation because we can't sell. that doesn't seem fair to us. >> you did say it's not a good look for blackstone. jim seemed sympathetic to his view that, look, we didn't say this was immediately liquefiable. >> no. from the very beginning to jon gray's point, they have made it clear, i think a key question is how many investors in this high net worth investors who their rai said, i have a great product for you. this is when interest was zero you can get access to blackstone, greatest investor of recent days. they took that opportunity and how many knew they wouldn't be able to get out when they wanted. >> i heard breit raised the dividend to shore up confidence. it gets into the broader conversation about the public market versus the alternatives, right. why are these two real estate funds up 10%, 12% this year when the public reits are down

30-plus percent. >> it's all about the market. >> you could say the same about private equity it's why they're appealing for private investors as a place to hang out >> there might have been an opportunity for those who saw it to say, hey, i'm going to get out of breit, 10% up for the year and publicly traded reit might be undervalued. >> maybe they're getting out because it's done so well. >> if you're trying to rent an apartment in new york city, it is going to cost you prices are only getting higher we'll talk about that story later on this hour as we have just come off session highs. don't go away.

welcome back to "squawk on the street." today is latina equal payday, marking how far into 2022 latinas must work to earn what their white male coworkers earned in 2021 alone this day fell six weeks earlier. this is the widest gap reported in about a decade.

break down the numbers and latinas are earning just 54 cents on the dollar, according to the latest u.s. census bureau data spread that across 40-year career, it's $1.2 million loss in income. that's around $30,000 a year, close to $2100 a month,$2,500 a to pay for ten months of child care or a year of food according to averages. why is this gap widening in part the data is being used this year, it's different. traditionally the wage gap was calculated using only data from full-time year-round workers this year's report includes data for part-time and part-year workers, such as migrant and seasonal workers who are disproportionately made up of women of color add that to the labor cuts and the decline in employment for latinas during the pandemic and the gap widens further for more on latina equal pay day and what experts say can be done to close this gap, head over to

cnbc.com/makeit. i hate doing these days. they're not celebrations, they're call to actions and a reminder how unfair and unequal the pay is for this company. starts with a cultural shift >> that's a big story. earnings season pretty much over, but not for "techcheck." we have the view from the c-suite as we break down results from c 3a1 and hashicorp we'll get a bunch of reports tonight. back in a moment as an independent financial advisor, i stand by these promises: i promise to be a careful steward of the things that matter to you most. i promise to bring you advice that fits your values. i promise our relationship will be one of trust and transparency. as a fiduciary,

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. well come back to "squawk on the street." stocks are higher right now and near session highs the s&p trying to snap that five-day losing streak we're keeping an eye on the energy sector where schlumberger, halliburton are some of the best names on the board so far the moves come amid volatility in oil prices after hitting 2022 lows yesterday we have loosening covid restrictions in china, also perhaps supporting prices alongside tanker bottlenecks related to the cap on russian oil and disruptions in the keystone pipeline here in the

americas as well so, those oil prices down in the session. there's more ahead on "squawk on the street." we'll be back after this break fe

country, not in new york city. robert frank has more on the city's growing affordability crisis why? >> well, rents are cooling in much of the country, but manhattan rents saw another increase in november the median rent up 2% for the month. up 19% over the last year. the average rent in manhattan over $5,200 a month. this creates two problems. one is affordability the other is for the fed rents are a big component of cpi. new york is the nation's largest rental market. you have elevated or rising rents in manhattan, that will put upward pressure on the cpi which adds to upward pressure on the fed to keep raising rents. soaring rents also pricing out younger new yorkers. new leases fell 39% in november. that is the biggest decline since the start of the pandemic in 2020.

brokers saying many renters are now facing rent hikes of 20% or more on leases they're simply leaving the city or just downsizing the declines in leases also hitting the high end three-bedroom leases down 44%. the average rent now for a three-bedroom plus in manhattan, now over $11,000 a month >> hard to imagine so many people love garbage and scaffolding. thank you. >> including us. we just pay. >> there's a lot of nice things, too. >> i don't understand why. >> it boggles the mind >> especially if people have to leave. >> and they're not even going to the office, all these people in new york what's the point >> we do have the best restaurants. culture. >> what do you got coming up on the big show today >> we have a great star-studded lineup the commerce secretary, gina

raimondo will talk about u.s. competitiveness. she has a big job implementing the c.h.i.p.s. act we have the ceo of etsy, josh silverman, he will talk about holiday shopping and pricing and how etsy is sort of different. it doesn't have warehouses or inventory. the stock has had a nice comeback >> sara eisen. >> thank you you're always welcome to join me >> "squawk on the street" is down "techcheck" now. good thursday morning. welcome to "techcheck. i'm carl quintanilla is time running out for tiktok maryland and texas ban the app on government devices while indiana sues over safety concerns elon musk's bankers reportedly considering tesla margin loans to cut that risky twitter debt tesla lost nearly a quarter of its value since musk became chief twit and the